AR Global’s Healthcare Trust REIT Completes Internalization and Rebrand, Executes 4-for-1 Reverse Stock Split
Healthcare Trust Inc. shared the completion of its previously announced internalization of management, marking a pivotal moment in the company’s evolution. According to the company, this strategic move is expected to result in annual savings exceeding $25 million in general and administrative expenses and enhance governance and shareholder alignment as the company evaluates a potential public listing on a national stock exchange.
As part of the process, the non-traded real estate investment trust sponsored by Nicholas Schorsch’s AR Global is also rebranding itself as National Healthcare Properties Inc., which it says better reflects its strategic vision and continued commitment to excellence in the healthcare real estate sector. As previously reported by The DI Wire, the company believes this rebranding aligns with its goal to position itself for long-term growth and value creation for its shareholders.
In conjunction with the internalization and rebranding, the company has executed a 4-for-1 reverse stock split to potentially enhance its stock’s marketability and liquidity. The reverse stock split is designed to better align the company’s share price with industry peers and facilitate greater investor interest as it pursue an exchange listing.
The company has engaged BMO Capital Markets Corp. as its financial adviser to assist it in the evaluation of a potential public listing of its shares of common stock as early as 2025, depending on market conditions.
The company will continue to be led by Michael Anderson, who has been appointed to the board of directors and remains as chief executive officer, and Scott Lappetito who continues as chief financial officer.
On March 27, 2024, the board approved and the REIT published a new estimated per-share net asset value of $13 as of Dec. 31, 2023. This was a 7.1% decrease year-over-year of its previous $14 NAV as of Dec. 31, 2022. Previous NAVs per share were $15.00 as of Dec. 31, 2021, $14.50 as of Dec. 31, 2020, $15.75 per share as of Dec. 31, 2019, and $17.50 per share as of Dec. 31, 2018. Shares were originally priced at $25.00 each.
From March 2018 until June 2020, the REIT paid monthly distributions to stockholders at a rate equivalent to $0.85 per annum per share of common stock. On Aug. 13, 2020, the board changed the common stock distribution policy. Under the revised policy, distributions authorized by the board were issued on a quarterly basis in arrears in shares of the company’s common stock valued at the NAV of common stock on the applicable date. On Jan. 3, 2024, the dividend rate was $0.015179. The REIT did not declare a quarterly stock dividend in April 2024.
In early August, the REIT filed its second quarter 2024 financials, reporting a net loss attributable to common stockholders of approximately $139 million during the first six months of the year, a sizeable increase over the net loss of approximately $38.3 million during the same period of 2023. The company reported funds from operations of negative $95.6 million during the first six months of 2024, compared with positive FFO of $1.3 million during the first six months of 2023. The company’s adjusted FFO during the first half of 2024 equaled $5.8 million, compared with $8.4 million during the same period in 2023. The dramatic year-over-year in the reported financials is largely attributable to the $98.2 million in termination fees it will pay to AR Global and its affiliates in regard to the internalization of management.
The REIT acquires, owns, and manages a diversified portfolio of healthcare-related real estate, focused on medical office and other healthcare-related buildings, and senior housing operating properties. As of June 30, 2024, the company owned 207 properties located in 32 states and comprised of 9.0 million rentable square feet. Its gross asset value was approximately $2.6 billion.
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